90TH CONGRESS 2d Session

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HOUSE OF REPRESENTATIVES

{ No. 1106

REPORT

APPROVING LONG-TERM CONTRACTS FOR DELIVERY OF WATER FROM NAVAJO RESERVOIR, N. MEX.

February 27, 1968.—Committed to the Committee of the Whole House on the' State of the Union and ordered to be printed

Mr. JOHNSON of California, from the Committee on Interior and Insular Affairs, submitted the following

REPORT

[To accompany S.J. Res. 123]

The Committee on Interior and Insular Affairs, to whom was referred the joint resolution (S.J. Res. 123) to approve long-term contracts for delivery of water from Navajo Reservoir in the State of New Mexico, and for other purposes, having considered the same, report favorably thereon with an amendment and recommend that the joint resolution as amended do pass.

The amendment is as follows:

In the last "whereas" clause of the preamble, after "November 21, 1967:" strike out all of the four columnar entries and insert the following:

A companion resolution (H.J. Res. 937) was introduced in the House by Mr. Morris for himself and Mr. Walker. The legislation was introduced as the result of an executive communication which is set out hereinafter.

PURPOSE AND NEED

The purpose of this legislation is to authorize the Secretary of the Interior to enter into three contracts for the delivery of water for industrial purposes from the existing Navajo Reservoir in New Mexico, which was authorized in the act of June 13, 1962 (76 Stat. 96, 43 U.S.C. 615ii et. seq.), the authorizing legislation for the Navajo Indian irrigation project and the San Juan-Chama reclamation project. Enactment of legislation along the lines of Senate Joint Resolution 123 is necessary because section 11 of the 1962 act provides that long-term contracts for water service from Navajo Reservoir, other than those related directly to the Navajo Indian project and San Juan-Chama project, shall be entered into only upon further hydrologic studies and determinations by the Secretary as to the availability of water and only after such determination has been submitted to the Congress and the contracts have been approved by the Congress.

COST

The enactment of this legislation will not involve any additional cost to the Federal Government. On the other hand, it will permit the collection of additional revenues to assist project repayment. Delivery of the full amount of water involved in the contracts covered by Senate Joint Resolution 123, as amended, will return to the United States approximately $450,000 annually.

BACKGROUND OF LEGISLATION

At the time the bill to authorize construction and operation of the Navajo Indian irrigation project and the San Juan-Chama reclamation project was before the Congress in 1962, this committee went into the water supply with respect to the San Juan River in considerable detail. A staff study summarizing the water supply situation is set out in Committee Print No. 5 of the 87th Congress. The findings of the staff study and of the committee are set out in the following language from the committee's report on the legislation:

Based upon the study of committee members and staff and upon the testimony given, the committee concludes that water is physically available and within New Mexico's entitlement under the compacts for the successful operation of the Navajo Indian irrigation project and the initial stage of the San Juan-Chama project. At the same time, the committee points out that its studies indicate that, with these two projects in operation, water uses in New Mexico may be approaching New Mexico's expected compact entitlement. The committee has added language in the legislation to requ re that additional water uses from Navajo Reservoir be fully justified on the basis of additional hydrologic studies and to require that contracts covering such additional uses be approved by the Congress before such contracts are executed.

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The provision added by the committee was approved by the House, accepted by the other body, and retained in the legislation as enacted. This is the legislative history with respect to the provision in the 1962 act which makes this legislation necessary.

On November 21, 1967, the Assistant Secretary of the Interior submitted to the Congress his determination that sufficient water is reasonably likely to be available from Navajo Reservoir to fulfill contracts that involve water depletions up to 100,000 acre-feet annually through the year 2005. His determination was accompanied by a draft of legislation for the approval of two contracts calling for water depletion of 16,250 acre-feet. By letter of January 29, 1968, the committee received a recommendation from the Department of the Interior that a third contract be approved, increasing the total depletion to 51,550 acre-feet. Testimony from representatives of the Department and the State of New Mexico indicates that no additional contracts are anticipated in the foreseeable future.

Copies of the three contracts which would be approved by this resolution have been furnished the committee. A summary of the contract terms is included hereinafter as a part of the executive communication from the Department of the Interior. The terms of the contract with the Utah Construction & Mining Co. are the same as those summarized for the contract with the Public Service Co. of New Mexico. It should be noted that all three contracts terminate on December 31, 2005, and are subject to renewal or extension only if authorized by law.

The contract with Southern Union Gas Co. is for the diversion of only 50 acre-feet annually to be used for pump cooling. The contracts with the Public Service Co. of New Mexico for the diversion of 20,200 acre-feet and with the Utah Construction & Mining Co. for the diversion of 44,000 acre-feet involve the use of water for coal-fired thermal electric generation plants in the Four-Corners area of New Mexico. It is estimated that there will be some return flow and that water depletion for the thermal electric generation plants will be 20 percent less than the amounts diverted. Payment for water taken from Navajo Reservoir is to be in advance at the rate of $7 an acrefoot. A water pollution control provision on return flow water is included in the contracts as well as the usual articles on water measurement, responsibility for distribution, penalties for delinquency in payment, water quality, recordkeeping, conflict of interest, and equal employment opportunity.

The contracts with the Public Service Co. and the Utah Construction & Mining Co. call for a standby charge until such time as the water is actually used. Water that is not used by January 1, 1973, will have to be paid for regardless of use, and if not used by January 1, 1977, the companies lose their right to the water. These two contracts also provide for coordination of Federal and non-Federal electric generation and transmission facilities.

AIR POLLUTION CONTROL

The committee notes with approval that the contracts with the Public Service Co. of New Mexico and the Utah Construction & Mining Co. also require the companies to install and operate equipment to minimize smoke, fly ash, and dust in stack emissions, and that

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the equipment initially installed must be acceptable to the Secretary of the Interior. Moreover, if in the future technological advances make it desirable in the opinion of the Secretary to install additional or modified air pollution control equipment, and agreement with the contractor cannot be reached on such installation, the matter will be submitted to arbitration and the arbitration award will be binding. Although there is no statutory requirement for the inclusion of this kind of provision in water supply contracts of the Federal Government, the committee believes that the provision is a desirable one and represents a desirable step in furtherance of air pollution control.

SUPPORT FOR LEGISLATION

This legislation is recommended by the administration and, thus, has its full support. The committee considered it important to ascertain the position on this legislation of the State of New Mexico because of its responsibility for the use and distribution of its water resources. New Mexico gave its approval to this legislation, and to all three contracts, by letter dated January 16, 1968, to the chairman of the committee. The committee also notes that this legislation has the approval of the Navajo Indian tribe and considers this important since the tribe is directly affected both by the water diversion and by the fact that a large percentage of the coal for the thermal electric plants will come from Navajo lands. The committee knows of no opposition to the legislation.

COMMITTEE'S CONCLUSIONS AND RECOMMENDATIONS

The committee was not impressed with the hydrologic determinations of the Department with respect to the availability of water to meet these contracts and other existing and planned diversions from the San Juan River, including the authorized Navajo Indian irrigation project, the San Juan-Chama reclamation project, and the Animas-La Plata project which is presently pending before the committee. The water situation in the San Juan River Basin has not improved since 1962 when it was studied by the committee and, if anything, is even more critical because of the low runoff during the last 6 years. However, the committee gives its approval to this legislation because (1) these contracts are temporary, (2) they include adequate protection against excessive use of water by the State of New Mexico, and (3) the committee believes it is primarily New Mexico's responsibility to determine how it wants to use its limited water supply. The committee therefore recommends that Senate Joint Resolution 123, as amended, be enacted.

EXECUTIVE COMMUNICATIONS

The Department's executive communication to the Congress, dated November 21, 1967, recommending this legislation covering two contracts, and its letter of January 29, 1968, recommending a third contract follow:

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U.S. DEPARTMENT OF THE INTERIOR,

Hon. JOHN W. MCCORMACK,

OFFICE OF THE SECRETARY, Washington, D.C., November 21, 1967.

Speaker of the House of Representatives, Washington, D.C.

DEAR MR. SPEAKER: Enclosed is a draft of a proposed joint resolution to approve long-term contracts for delivery of water from Navajo Reservoir in the State of New Mexico, and for other purposes. We recommend that this joint resolution be referred to the appropriate committee for consideration, and we recommend that it be enacted.

The act of June 13, 1962 (76 Stat. 96, Public Law 87-483), authorized the construction and operation of the Navajo Indian irrigation project and the San Juan-Chama project as participating projects of the Colorado River storage project. The act also authorized the Secretary to market water from Navajo Reservoir for other municipal and industrial uses in New Mexico if he determines on the basis of hydrologic investigation that such water is reasonably likely to be available. Section 11(a) of the act provides in part that: "No long-term contract, except contracts for the benefit of the lands and for the purposes specified in sections 2 [Navajo Indian Irrigation Project] and 8 [San Juan-Chama Project] of this Act, shall be entered into for the delivery of water stored in Navajo Reservoir or of any other waters of the San Juan River and its tributaries, as aforesaid, until the Secretary has determined by hydrologic investigation that sufficient water to fulfill said contract is reasonably likely to be available for use in the State of New Mexico during the term thereof under the allocations made in Articles III and XIV of the Upper Colorado River Basin Compact, and has submitted such determination to the Congress of the United States and the Congress has approved such

contracts."

I hereby determine that sufficient water is reasonably likely to be available under the provisions of section 11(a) to fulfill contracts that involve water depletions up to 100,000 acre-feet annually through the year 2005. The basis for this determination is explained in the enclosure entitled "Hydrologic Determinations."

Also enclosed with this letter are copies of the following two contracts which have been negotiated for the delivery of water from Navajo Reservoir for municipal and industrial use in the Four-Corners area of New Mexico. They involve an estimated water depletion of 16,250 acre-feet annually, and are within the preceding determination.

A summary of the contract provisions is enclosed.

The purpose of the proposed legislation is to approve the execution of these contracts. Other contracts within the 100,000 acre-feet total

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